As businesses develop throughout the region, their expenditures are becoming more important to economic growth, according to a new report released by Tribal Credit, a platform dedicated to startups and young entrepreneurs.
The report highlighted local enterprises’ most significant spending categories based on corporate card spending data from small, medium, and emerging businesses tracked over the last year.
As shown by Tribal data, online advertising was the category where companies in various stages of development spent the most during this period, further demonstrating the long-term growth of online sales.
For companies and advertising service providers, payments for digital campaigns with cards streamline the payment process, control of expenses, and the relationship with platforms.
The second largest expenditure on corporate cards was for freight services and logistics, primarily for imports and exports. Growing e-commerce provides companies in various stages of development with an excellent opportunity to expand to additional markets, which has become increasingly important with the growth of e-commerce.
The study further highlighted that companies spent the third highest amount on technology and computing infrastructure, such as hardware, software, and programming services. Digital infrastructure spending shows that companies continue to adapt their operations to the digital economy.
In MENA, Tribal observed that travel spending, including travel agencies, flights, and hotels, showed the most substantial growth between the second half of 2021 and the first half of 2022. The region’s companies in various stages of growth have ranked travel spending among the top ten expenses during the last quarter. A high increase in spending in this sector indicates that companies are expanding their markets and traveling to improve their operations.
Amira Fadel, Tribal’s Regional Manager – MENA, said: “Companies are using their capital and corporate credit resources to make payments, especially through electronic commerce, directly related to boosting business growth.”
SMEs in Egypt account for 90 percent of active enterprises and 80 percent of GDP, according to the Organization for Economic Cooperation and Development. In the UAE, SMEs represent 86 percent of the private sector labor force and 60 percent of GDP. Furthermore, Saudi Arabian government data indicate that SME contribution to GDP has risen to 28.7 percent since March 2021.